© Reuters. FILE PHOTO: Cars drive on the road during evening rush hour in Beijing, China, July 1, 2019. Photo taken July 1, 2019. REUTERS/Jason Lee/File Photo
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SHANGHAI (Reuters) – The China Association of Auto Manufacturers on Saturday, citing antitrust law, backtracked on a pledge to avoid “abnormal pricing” made two days earlier by 16 automakers, including Tesla (NASDAQ:).
The pledge, organized by CAAM on Thursday by companies including Chinese electric car makers Nio (NYSE:), Li Auto and Xpeng (NYSE:), was interpreted by some as signaling a truce in a price war that threatened industry-wide profitability.
But Elon Musk’s electric car giant, Tesla Inc, on Friday launched a global program that allows buyers to get additional incentives through referrals from existing customers, a strategy traditional automakers have long used to boost sales.
In a statement on its website on Saturday, CAAM said it realized the pricing undertaking violated Chinese antitrust law and said it would remove it from a list of commitments signed by automakers, which was witnessed by an official from the Ministry of Industry and Information Technology.
CAAM said it would urge 16 companies and other cartel members to comply strictly with antitrust law and compete fairly with independent pricing.